Allison Transmission (ALSN) Q3 earnings report preview: what to look for

Transmission provider Allison Transmission (NYSE:ALSN) will be announcing earnings results this Monday after market close. Here’s what to expect.

Allison Transmission beat analysts’ revenue expectations last quarter, reporting revenues of $1.57 billion, up 92.4% year on year. It was a very strong quarter for the company, with full-year revenue guidance beating analysts’ expectations and full-year EBITDA guidance slightly topping analysts’ expectations.

Is Allison Transmission a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting Allison Transmission’s revenue to grow 112% year on year, a reversal from the 15.9% decrease it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Allison Transmission has missed Wall Street’s revenue estimates multiple times over the last two years.

Looking at Allison Transmission’s peers in the heavy transportation equipment segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Trinity delivered year-on-year revenue growth of 17.8%, beating analysts’ expectations by 7.4%, and Federal Signal reported revenues up 18.1%, falling short of estimates by 1.1%. Trinity traded up 15.3% following the results while Federal Signal’s stock price was unchanged.

Read our full analysis of Trinity’s results here and Federal Signal’s results here.

Over the last year or so, investors' attention has moved from one major market theme to the next, spanning AI disruption and surging infrastructure investment to geopolitical tensions, interest rates, and the health of the broader economy. While some of the heavy transportation equipment stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.2% on average over the last month. Allison Transmission is down 8.4% during the same time and is heading into earnings with an average analyst price target of $138.91 (compared to the current share price of $108.02).

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